A Threatening Voice?

Phone Companies Uneasy About Use Of Internet For Calls

To a growing number of computer users, a telephone call is simply a verbal e-mail. But to traditional phone companies, it sounds more like a threat.

The technology to make calls over the Internet has been available for several years. Sometimes known as Internet telephony -- or Voice over Internet Protocol -- it's poised to take off, and traditional phone companies and government regulators are turning up the scrutiny.

Voice calls carried over computer networks can do things not possible on the networks operated by phone companies. Arranging a call-in conference among half a dozen people, for example, can be as easy as dragging the names of each person into a virtual conference room on a computer screen and pushing a button to connect everyone.

Voice mail messages can be identified and ranked on the screen and even answered by e-mail. And video can be added by attaching a small camera to the mix and activating some software.

While providing more features, VoIP technology usually costs less than traditional phone service because it rides on data networks and doesn't require the costly switches and other equipment necessary for a circuit-based voice network.

Internet telephony is also free of the numerous regulations, fees and charges applied to regular phone calls.

While traditional phone companies like SBC Communications Inc. and AT&T Corp. carry data on their networks, they make most of their money from voice traffic, said Paul Butcher, president of Mitel Networks, a company that provides integrated computer/^]phone systems.

VoIP undermines that revenue stream, he said.

"Phone companies would like to kill it, but they can't. It's like the music industry and Napster: Pirating music on the Internet is illegal, but even so, the industry can't stop it," he said. "VoIP is legal, so it's even harder to stop."

Several state utility boards have looked at imposing charges and fees on VoIP, and in 2003, regulators in Minnesota tried doing it.

The move was blocked by a federal judge who cited federal laws that exempted Internet technology from fees and regulation.

But it remains a gray area.

Meanwhile, a survey released last month by CompTIA, an information technology trade association based in Oakbrook Terrace, Ill., found that about half of small- to medium-sized businesses are looking at buying integrated computer/phone systems when they replace current equipment in the next two years.

Companies with multiple locations and a mobile work force are especially open to the new technology, said Edward Migut, a CompTIA executive.

"It's a matter of evolution," said Migut. "Everything in information technology is moving toward the IP platform. The Internet is much more stable now than it was just a few years ago. Smaller businesses are getting more comfortable with it."

The FCC has scheduled a forum in December to discuss regulating VoIP and will seek public comment about what regulation, if any, would be appropriate for VoIP.

Jon Van is a reporter for the Chicago Tribune, a Tribune Publishing newspaper.